Some J.P. Morgan shareholders aren’t fools

Opinion: ‘Say-on-pay’ vote notes banker raises in a down year

By

DavidWeidner

SAN FRANCISCO (MarketWatch) — There is little doubt that J.P. Morgan Chase & Co. executives, including Chief Executive Jamie Dimon, are shrugging off the results of today’s shareholder meeting. And why not? All of the measures they supported passed with healthy margins.

photo by Jurvetson/flickr

James Dimon CEO of J.P. Morgan & Chase

But make no mistake, shareholders may love the bank’s performance under Dimon, may want him to lead the bank for the next century, may have total confidence — but they know when they are being made fools of.

Shareholders on Tuesday approved the bank’s compensation packages including Dimon’s by a 77.9% margin. Though the victory may seem reassuring, it isn’t. Last year, amid trading scandals, lawsuits and fraud allegations, the measure passed with 92.2% of the vote.

Dimon received $20 million in compensation for 2013, which includes a $1.5 million salary plus $18.5 million in “incentive awards,” according to the proxy statement. That is up from a total $11.5 million in 2012, a year in which the bank suffered billions in trading losses.

The most recent year was hardly much better. J.P. Morgan
JPM, -0.45%
reported disappointing profits ($17.9 billion vs. $21.3 billion for the prior year) including a loss in the third quarter stemming from legal settlements. It’s stock has risen just 2.7% compared to a 8.8% rise during the last 12 months for the KBW Bank Index
BKX, +0.20%

Given those results, its a wonder any shareholders would support a pay raise for Dimon or any of his management team. The vote not only says something about the audacity of the board and management of the company, but of the passive, almost sheep-like nature of the institutions that hold J.P. Morgan stock for the benefit of their customers.

Yes, 77% of shareholders may be proud of the bank. The remaining 22.1%? They can be proud of themselves.

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